Lexis Cite:
1997 DOT Av. LEXIS 118
Westlaw Cite:
1997 WL 120400
Author:
Murphy, Patrick V., Deputy Assistant Secretary for Aviation and International Affairs
Author Title:
Deputy Assistant Secretary for Aviation and International Affairs
Complainant(s):
Dade County (Fla.)|American Airlines, Inc.
Respondent(s):
Air Canada|Delta Air Lines, Inc.|Lufthansa|Trans World Airlines, Inc.|United Air Lines, Inc.|USAir
Airport(s):
Miami International Airport (MIA)
History:
Petitions for review denied sub nom. Air Canada v. Dep't of Transp., 148 F.3d 1142 (D.C. Cir. 1998).
Holding:
Finding violation in part.
Abstract:
Dade County requested that the Department of Transportation determine whether the landing and terminal fees charged at Miami International Airport were reasonable insofar as the Airport equally allocated most of the cost of building the A/D Concourse, a new terminal facility for American Airlines, to all the airlines using the Airport’s terminal facilities rather than to American alone as part of a program to renovate and expand facilities used by most airlines at the Airport. Air Canada, Delta, Lufthansa, TWA, United, and USAir (the Joint Carriers) alleged that the Airport’s equalization of the fees amongst the Joint Carriers was unreasonable, because American would obtain a better and costlier terminal facility without bearing the cost of the project or at least the cost of the features that distinguished it from other airports’ terminals. The Deputy Assistant Secretary found Respondent in violation in part.|Burden of Proof:|The Joint Carriers bore the burden of proof, because the proceeding at hand resulted from their suit against the County challenging the legality of the Airport’s fees in district court, and in district court the Joint Carriers would have borne the burden of proof if the court had adjudicated their claims. (p. 16).|Assigning the burden of proof to the Joint Carriers resulted in no unfairness to them, because they began the litigation over the airport fees, were able to conduct discovery at the prior district court proceeding, and have known that the fee issue would be litigated in an administrative forum. (pp. 16-17).|Rates and Charges:|Although American Airlines alone must bear the costs for improvements to the baggage system, the other improvements (i.e. automated people mover or train, demolition costs replacement gates) were “not so special or unusual that they should be charged entirely to American.” (pp. 27-29). Under the County rate equalization methodology, "'[a]ll rental rates for the same class of space are equalized, i.e., each airline is charged the same rental rate for the same class of space regardless of age, location, condition or any other factor.'" (p. 19) (quoting the Dellapa Declaration at 5). Since actual fees were based on each airline's activity, and since American's activities were expected to increase as a result of the new A/D Concourse, the Joint Carriers would pay a smaller share of terminal fees. (p. 20).|Although the Airport’s exclusive award of long-term terminal leases to American was troubling, it was not a proper basis for invalidating the Airport’s allocation of the costs of the new A/D Concourse. (p. 32).|In light of other airports’ practices, the Airport’s terminal and landing fees were reasonable, since at least two other airports (Chicago’s O’Hare International and Pittsburgh) relied on similar rate equalization methodologies. (pp. 33-34).|Other Reasonableness Issues:|The Joint Carriers were not prejudiced by the Airport witness’s potentially erroneous distribution of the cost of the A/D Concourse between landing and terminal fees, because this case was about the allocation of costs of the A/D Concourse on principle, not the actual calculation of costs. (p. 36).|The cost for a new FAA control tower in the landing and terminal fees was disallowed on the basis that the tower had neither been built nor was yet in use was affirmed. (pp. 36-37).
Index Terms:
Jurisdiction - Section 47129|Burden of proof|Expedited proceeding|Landing fees|Airline agreement|Rates and charges